sebi:Order/VV/NK/AK/2021-22/14796

SEBI · SEBI · 2021-04-26 · Vijayant Kumar Verma, Adjudicating Officer

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Facts / Headnote

Violation of regulations 3(a),(b),(c),(d), 4(1) and 4(2)(a) of PFUTP Regulations held established; monetary penalty under section 15HA of SEBI Act imposed payable within 45 days

Provisions invoked

• s. 15
• s. 19
• s. 11B
• s. 11
• s. 15H
• s. 16
• s. 15I
• s. 15F
• s. 28A

Regulations

• Reg. 3
• Reg. 2(1)(c)
• Reg. 200
• Reg. 3(a)

Parties

• Sarita Agarwal

Holding

The Noticee's 10 reversal trades in 5 illiquid stock option contracts at BSE violated regulations 3(a),(b),(c),(d), 4(1) and 4(2)(a) of the PFUTP Regulations and attract monetary penalty under section 15HA of the SEBI Act.

Full text

Adjudication Order in respect of Sarita Agarwal Page 2 of 37 in the matter of dealings in Illiquid Stock Options at BSE be manipulative and deceptive in nature. In view of the same, SEBI initiated adjudication proceedings against the Noticee for violation of the provisions of regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (hereinafter referred to as the “PFUTP Regulations”).

Adjudication Order in respect of Sarita Agarwal Page 3 of 37 in the matter of dealings in Illiquid Stock Options at BSE generating artificial volumes in stock options segment of the BSE during the Investigation Period. ii. The Noticee has traded in 5 unique contracts, from which the Noticee has allegedly executed 10 non genuine trades in 5 Stock Options contracts which resulted in artificial volume of total 596000 units. Summary of dealings of the Noticee in a Stock Option contract, in which the Noticee allegedly executed non genuine trades during the I.P., is as follows: S . N o . Contract Name Avg. Buy Rate (Rs) Total Buy Volume (No. of units) Avg. Sell Rate (Rs) Total Sell Volume (No. of units) No. of alleged non genuine trades of Noticee in the Contrac t Alleged Artificia l volume generat ed by Noticee in the Contrac t (No. of Units) % of Non Genuine trades of Noticee in the contract to Noticee's Total trades in the Contract % of Non Genuine trades of Noticee in the contract to Total trades in the Contract % of Artificial Volume generated by Noticee in the contract to Noticee's Total Volume in the Contract % of Artificial Volume generated by Noticee in the contract to Total Volume in the Contract

Adjudication Order in respect of Sarita Agarwal Page 4 of 37 in the matter of dealings in Illiquid Stock Options at BSE c. Substantial 100% of the volume generated by the Noticee in each of the above contracts, was artificial volume. Further, said artificial volume generated by Noticee also contributed significant 7.91% to 86.84% of the total volume from the market in above contracts. d. Alleged non genuine trades executed by Noticee had significant differential in buy rates and sell rates considering that the trades were reversed on same day. e. By indulging in execution of aforesaid non-genuine reversal trades, it has been alleged that the Noticee has violated regulations 3(a),(b),(c),(d) and 4(1), 4(2)(a) of the PFUTP Regulations. f. The aforesaid alleged violations, if established, make the Noticee liable for monetary penalty under section 15HA of the SEBI Act.

Source: SecMarx — sebi:Order/VV/NK/AK/2021-22/14796. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.